It’s one of the central issues our industry faces: how do we bring more people to advice?
I don’t believe we can answer this effectively without confronting a similar, yet fundamentally different, question: how do we get more people from a broader range of backgrounds into advice?
The sector is making important progress in shrinking the advice gap, and the Financial Conduct Authority’s decision in December to relax the advice/guidance boundary was another step in the right direction.
If we want to serve a broader, deeper market of clients, we must have the perspectives, skills and products to match
But to make further headway we can’t just look at how we provide advice. We need to think about who is helping to deliver it — from frontline professionals right through the supply chain that stretches far behind the adviser’s desk.
A stronger focus on improving diversity, equity and inclusion (DE&I) is key. Why? Diversity in teams equates to diversity of thought and experience.
If our industry wants to serve a broader, deeper market of clients, we must have the perspectives, skills and products to reflect the circumstances and needs of our expanded market.
Advisers know better than anyone the benefits of personalised approaches. And the Consumer Duty has put under a microscope the need to ensure every part of the advice process is geared towards delivering good outcomes.
We must deliver clearer pathways into our businesses and keep reviewing the ways we help people of all backgrounds to thrive
Bringing more perspectives on board — whether that’s in terms of gender, race or socio-economic background — will help deliver these good outcomes and support us in identifying opportunities for new products and services.
There will also be significant benefits for businesses themselves, particularly with decision making. As a long-time manager, I know first hand how valuable a range of viewpoints is to minimising potential bias and challenging the groupthink that can lead to narrow ideas and ineffective action.
So, what can the sector do now to help make our industry more diverse? This is something close to my heart — not just given the responsibility I have for our culture and business, but as someone who entered this industry straight from an inner-city state school and who didn’t go to university.
I’m a firm believer that more diverse businesses are also more resilient and successful
Two important focuses should be promoting accessibility and demonstrating opportunity.
In part, this is about showing people — particularly those from backgrounds or with characteristics that have previously been or felt excluded from the sector — that advice can be an industry that offers them opportunity, career progression and professional fulfilment.
Supporting and profiling role models will be important here. There are still cases where people say, ‘I didn’t know advice was for someone like me.’
For a person who feels excluded or disenfranchised, there is nothing more powerful than hearing directly from someone with a similar background about how they have successfully made the industry their home.
Diversity in teams equates to diversity of thought and experience
We must do more to enable these stories to be told, and listen when they highlight issues that still need to be addressed. As well as helping to attract a broader range of talent, this will foster a culture of greater transparency — something that enables businesses to continue to challenge themselves, grow and improve, but also shows clients and employees that a more inclusive workplace is a genuine commitment.
We must also deliver clearer pathways into our businesses and keep reviewing the ways we help people of all backgrounds to thrive.
Abrdn is a proud member of the Diversity Project and a backer of careers routes such as the Investment 20/20 programme. We are also focused on upskilling through a partnership with Limelight Careers, which gives young people the opportunity to secure a Scottish Vocational Qualification in providing financial services or in management.
To make further headway we can’t just look at how we provide advice. We need to think about who is helping to deliver it
And we are proud to be part of a growing movement of employers across the UK that are committed to paying the real living wage.
Improving DE&I will be a journey; one we all must be diligent and persistent in following. And, while it will have specific benefits for the advice gap, its advantages stretch far beyond.
I’m a firm believer that more diverse businesses are also more resilient and successful. Above all, it’s the right thing to do.
Noel Butwell is chief executive officer at Abrdn Adviser
This article featured in the February 2024 edition of MM.
If you would like to subscribe to the monthly magazine, please click here.